Growth in construction work in Scotland stalled during the second quarter of this year, but continued in the rest of the UK, according to new research published today.
The Royal Institution of Chartered Surveyors’ (RICS) latest UK Construction Market Survey reports a drop in Scottish house building in both the private and public sectors as well as a reduction in the private industrial sector during the three months to the end of June.
Summing up the situation in the construction market, the report states: “The overall workloads indicator turned slightly negative in Scotland for the first time since Q1 2013.
“The slowdown was visible across most sectors with respondents only reporting modest growth in private commercial and infrastructure.”
It adds: “Aside from Scotland, where activity has flat lined relative to Q1, respondents in all other parts of the UK continue to report a rise in workloads.”
Among those questioned across the UK for the survey, more than two-thirds cited finance as the biggest constraint to growth. Planning and regulatory delays were also seen as a key issue by 60% of respondents.
The industry continues to be affected by skills shortages, with quantity surveyors in particularly short supply in Scotland.
Commenting on the report Aberdeen-based RICS member Neil Donald said: ““This slowdown has been coming for many months and the current political and economic uncertainty is clearly adding to this issue.
“But it is not the only factor in an economy still recovering from the last recession.”
RICS chief economist Simon Rubinsohn said moderation in the growth trend across the UK revealed by the survey was “not altogether surprising” given the build-up to the EU referendum.
He added: “Significantly, the biggest issue at the present time alongside uncertainty looks to be credit constraints.
“Encouragingly, the swift actions of the Bank of England in creating additional capacity for the banking sector to provide funding to meet demand should help alleviate some of this pressure.
“Nevertheless, anecdotal evidence does indicate that the challenge for the British government in establishing a new relationship with the EU could see some investment plans in the construction sector scaled back.”
Despite the second quarter findings more than a fifth of Scottish firms taking part in the survey said they expected activity to rise rather than fall during the year ahead.